BEHAVIOR CHANGE: SOFTWARE ALONE IS NOT THE ANSWER

1.

Select all reasons for pricing irrationality in used vehicles.

Check all that apply.

Human desire to avoid losses (profit loss)

Past experience with customers who didn’t know better

Calendar incorrectly tells dealers to go for all the gross on Day 1 of inventory age

Vehicle values are wildly unpredictable

2.

What drives sustainable performance improvement in the dealership?

Buying software

Hiring third-party consultants to help

Changing dealership process around merchandising

Adopting a proper strategy that’s well executed through people and process

3.

What is the best pricing decision on Day 1 for inventory that is in distress (own it for too much money, high Market Days Supply, low sales volume)?

Price the vehicle to move quickly, even if it means little or no gross profit

Give the vehicle time before dropping the price to make your gross

Adjust the vehicle’s ACV to improve its profit potential

Price the vehicle higher to make up for your higher vehicle cost

4.

A customer offers to buy a vehicle with high ROI potential (you own it really right; it has low market days supply and high sales volume) at a price that reduces your potential gross by 50 percent. You’ve owned the vehicle for ten days. Should you take the deal?

Yes, but only if you counter the customer’s purchase price with a higher number to get more gross

Yes, because we don’t want to damage our customer relationship

No, because we know we can be patient with a high ROI vehicle to optimize its ROI/profit potential

Yes, because it’s always best to roll the vehicle when you’ve got a buyer in hand

5.

What is needed to correct an inventory with an inverted pricing profile (Bronze vehicles priced high and Platinum vehicles priced low)?

Change the person responsible for pricing your vehicles

A behavior change to ROI-focused pricing, where Bronze vehicle prices reflect more urgency and Platinum vehicles more patience

Buy more inventory to increase your sales volume

Ensure we are changing inventory pricing on a daily basis

6.

If a dealership shifts the focus on pricing to optimize their ROI on each vehicle in inventory, what will happen?

Volume of sold inventory will increase, and total gross will increase

Volume of sold inventory will increase, but total gross will decrease

Volume of sold inventory will decrease, but total gross will increase

Volume of sold inventory will decrease, and total gross will decrease